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Limited Medicaid Expansion Sought by Arkansas Governor

By Marissa Evans, CQ Roll Call

August 20, 2015 -- Republican Arkansas Gov. Asa Hutchinson said Wednesday that he's open to continuing the state's Medicaid expansion program, which serves 220,000 low-income residents, beyond its 2016 expiration if the state can make some sweeping changes that would be a tough sell to the Obama administration.

In a presentation to his state's Healthcare Legislative Task Force, created earlier this year to consider changes to the program, Hutchinson outlined a seven-point proposal emphasizing cost-cutting and encouraging beneficiaries to work.

"As governor I will accept the continued expansion dollars from the federal government if we can achieve the...waivers that are needed," Hutchinson said.

Under the 2010 health care overhaul, state Medicaid programs could be expanded to enrollees with incomes up to 138 percent of the federal poverty line. The cost is 100 percent covered by the federal government until 2020, when states that expanded will be responsible for chipping in 10 percent. Twenty-eight states and the District of Columbia are participating in the expansion already. Alaska and Montana are joining them soon. Arkansas is one of only 12 Republican-controlled states to undertake an expansion.

The healthcare task force is working to overhaul the state's Medicaid program. Under its current program, Arkansas buys private health insurance for residents who qualified for Medicaid when the state expanded it in 2014. The program ends in December 2016.

Hutchinson's ideas for continuing the program past 2016 included eliminating non-emergency coverage, requiring beneficiaries to be referred to job-training programs, saving $50 million and strengthening audit requirements. However, three of his ideas will need waivers from the Centers for Medicare and Medicaid Services. The so-called 1115 waivers allow state governments more flexibility in how they run their Medicaid programs.

His proposals also would require people who qualify for Medicaid to enroll in employer-sponsored health coverage if it's available, while the state would cover their deductibles and copayments. He also would require beneficiaries who earn above 100 percent of the poverty line to pay partial premiums.

Hutchinson also said he wants to limit access to the private option, in which the state buys private insurance for beneficiaries, so that only working individuals, those in work training programs or school could qualify.

Hutchinson's presentation comes as the state works to re-verify that the 250,000 people using the private option are eligible. He said that the verification process would reduce the number eligible to 220,000, saving the state $180 million per year.

"I believe program integrity is important," Hutchinson said. "I believe that those who are on the program need to qualify based upon income guidelines."

Hutchinson noted to the committee that a change in administration could also determine how much or how little flexibility the state would have with the 1115 waivers.

"Elections do make a difference so timing of when we get these waivers and when we approach those is important," Hutchinson said. "We're going to do it now but you can have a permanent solution or a sunsetted solution so that we have two opportunities to seek the waivers and flexibility that we need."

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